Does Unlocking Phones Really Matter?

Effective this past Saturday, January 26, it became a violation of the Digital Millennium Copyright Act (DMCA) to unlock your smartphone. But is it really a major issue for consumers or just another round of arguing between big business and a few hackers?

The DMCA, passed in 1998, was designed to prevent copying digital materials such as DVDs or music. After DVD encryption was broken, a flood of DVD-ripping software hit the market. These days, they are virtually extinct, at least as far as commercial software, but now the DMCA has been extended to smartphones. Under the DMCA, the Librarian of Congress has been designated the determiner of which devices or software will be included in the DMCA protections.

Last October, the librarian ruled that unlocking cellphones would no longer be allowed, but gave consumers 90 days to buy a phone and unlock it. Last Saturday, that grace period ended.

This means that people may not legally unlock their phone so that it can be used with another carrier — an AT&T phone with T-Mobile, for example. This is different from jailbreaking, which is the process of allowing an iOS device from running apps not authorized by Apple.

A Range of Policies

Although it’s now illegal to go to an unlocking service, some telecoms will unlock their subscribers’ handsets. The issue is a complicated one because each carrier has different unlocking policies. While the majority operate on the two-year lock-in subsidy plan, there are also exceptions.

Verizon sells the iPhone 5 unlocked, AT&T will unlock a phone after your contract expires, and Sprint will unlock phones for international travel after three months with the company. T-Mobile, though, has made a lot of hay about unlocking, in particular pursuing iPhone customers to come over to its network and offering to unlock the phones for them.

Is This a Real Issue?

Will Stofega, program director for mobile device technologies and trends at IDC, thinks the Librarian of Congress’ decision is unlikely to be a problem for the masses. “I don’t think for an end user they are really at risk. Most users don’t know what a SIM card is let alone an unlock code. They only find out when they go to Europe and can’t use their phone. Right now it’s a big policy debate,” he said.

Jack Gold of J.Gold Associates, a mobile market research firm, agrees. “I see this more as a tempest in a teapot. The vast majority of phones never get unlocked anyway. Most consumers just buy another phone and don’t know about phone unlocking. And business users who need unlocked phones so they can have a SIM installed when they travel internationally will still get that as part of the contract they negotiate with the carriers,” he said.

Nearly all enterprises have some level of contract negotiations for their needs and some phones even come with dual SIM slots for domestic and international travel, Gold added. “So that leaves a few ‘techies’ who know enough to even think about unlocking a phone. I suppose someone could get in trouble if they are investigated for something, but does anyone really think there will be Phone Police out there looking for people who have jailbroken their phones?” he said.

Stofega said the argument is mostly between the EFF and some hackers on one side and the CTIA and carriers on the other, with most people unaffected and unconcerned. That said, he welcomes the debate.

“It’s an important public policy debate to have, who owns [the phone]? It’s not about the average user but there could be people made an example of and this is a stick to use by carriers,” he said.